Comparing Poverty and Income Inequality in China and the United States
China has made significant progress in reducing poverty over the past decades. In 1990, approximately 943 million people, which was 83% of the population, lived on less than $3 per day (measured in 2021 dollars). By 2019, that number was effectively reduced to zero.
In contrast, poverty in the United States has worsened. More than 4 million Americans, or about 1.25% of the population, currently live on less than $3 per day. This figure is more than triple the level from 35 years ago. Despite the fact that the US has a per-capita GDP about six times higher than China’s, more extreme poverty exists within the US.
Income inequality in the US has also followed a concerning trend over the past decades. In 1980, the share of the middle income group relative to the top 90th percentile was about 52.5%. This declined to 48% by 2000 and further to 42.5% by 2023. The poorest 10% of Americans hold just about 1.8% of the national income, a share comparable to that of poor populations in Bolivia. For comparison, the bottom 10% in Nigeria, China, and Bangladesh hold roughly between 3% to 3.7% of their respective national incomes.
Certain policy decisions have had a notable impact on income distribution and poverty. Under President Trump, measures such as the Big Beautiful Bill Act and tariffs increased costs and reduced healthcare and nutrition aid. According to the Yale Budget Lab, income reductions were expected for all but the richest 20% of Americans, with the poorest 10% facing about a 7% cut.
Over the last 50 years of governance in the US, inequality has remained persistent. The only notable deviations were during President Clinton's and President Trump’s first term. However, despite rhetoric about supporting workers, policies under Trump ultimately contributed to worsening inequality.
